Yahoo Finance Betting markets predict no-deal after failed Brexit summit
Betting odds have predicted that the UK could be on course for a no-deal Brexit after a summit between UK prime minister Boris Johnson and European Commission president Ursula von der Leyen failed to deliver progress in Brexit trade talks on Wednesday.
Johnson travelled to Brussels on Wednesday for a three-hour working dinner with his European counterpart. Talks ended with little progress. A Downing Street source said late on Wednesday night that “very large gaps remain” after “frank” discussions.
Both sides set a deadline of Sunday (13 December) to make a final call on the trade negotiations.
This caused betting odds to flip with no-deal before the end of the year now favoured at 55%, according to data from peer-to-peer betting exchange Smarkets.
A week ago, betting odds put a Brexit trade agreement between Britain and the European Union by the end of this year at 85% but is now around 40 percentage points lower after the apparently unsuccessful talks.
Betting odds on the transition period being extended steadily rose in recent days from a 1-in-6 chance (17%) to almost a 1-in-4 chance (24%).
Von der Leyen unveiled “contingency measures” on Thursday, with policymakers ramping up preparations for the UK crashing out without a deal in a few weeks’ time in a sign expectations are fading in Brussels of a breakthrough.
“Negotiations are still ongoing but the end of the transition is near. There is no guarantee that if & when an agreement is found it can enter into force on time. We have to be prepared including for not having a deal in place on 1 January,” Von der Leyen said on Twitter.
She shared an EU document on its proposals, which warned of “significant uncertainty” about whether a deal would be reached.
READ MORE: EU sets out no-deal Brexit plans to limit travel and fishing chaos next month
Smarkets head of political markets, Sarbjit Bakhshi, said: “Following Ursula von der Leyen and Boris Johnson’s dinner last night in Brussels, the pair have agreed to a Sunday deadline on deal or no-deal. Without agreement on the level playing field and especially a safeguard to prevent the UK lowering its standards to compete with the EU, an agreement looks increasingly implausible.
“The pessimistic tone from both sides has impacted our betting market on whether there will be a deal by the end of the year, which flipped last night to make ‘no-deal’ the most likely outcome. This is the first time it has been more likely since September and a 40-percentage-point rise from last week. However, the fact that this is still a close market suggests a last-minute surprise is possible.”
WATCH: Why is fishing so important in Brexit talks?
